5 Assume that the following data descibe the current condition of the commercial banking system 10 Value points Total reserves $35 billion $650 bilion Transactions deposits $250 billion Book Cash held by public Required reserve ratio 005 ASR Print bon References a How large is the money supply (M1)? b. Are the banks fully ublizing the londing capacity billion in excess reserves Banks currently have Now assume that the public deposited another 515 billion in cash in transactions accounts c What would happen to the money supply initially before any lending takes place)? Assuming the 515 billion in cash is not new money in the system, Mt will bition d. How much would the total lending capacity of the banking system be after this portfolio switch billion How large would the money supply be if the banks uity utiled their lending capacity? What three step could the Fedtake to offset the potential growth in M12 reserve requirements the discount rate bonds